It has become conventional wisdom: life insurance is a self-less purchase, you must buy it to take care of others, but disability insurance is a selfish purchase because you buy it to take care of yourself.
Nonsense. Selfish people do not buy insurance.
I first heard this selfish-sale idea back in the early 1990s when I started in the insurance business and was working hard to develop an expertise in disability insurance. The idea persists today as a primary concept in learning how to sell disability insurance. It bothered me then, and it makes me angry today because now I know how dangerous it is to our business and our clients.
If you assume that a person must be "selfish" to buy disability insurance and your sales approach reflects this, even subtly in tone, then you cannot be effective in getting people to take action to buy insurance that they do not want but desperately need. Clients go without coverage, families and our communities are at risk, and we go without compensation.
If a person is married or partnered and/or has children, owning disability insurance does not protect the insured as much as it protects those the insured is responsible for financially. Of course, it will help maintain basic lifestyle costs for the insured, but that alone does not motivate people to buy, especially men who exist in a bubble of belief that, "It simply will never happen to me."
It may never happen, in fact, for white-collar workers the odds are actually very small. But if it does, what happens to the life and lifestyle of the people you love and for whom you are financially responsible?
If this sounds like a life insurance sale, it should, it is how we have sold life insurance for hundreds of years. It's how the Certified in Long Term Care (CLTC) designation program has been teaching the sale of LTC insurance for 15+ years. It is not about what happens to you ... it is about what happens to them. You must buy life insurance to protect those you love. You must buy LTC insurance to protect those you love. You must buy disability insurance to protect those you love. If you do not care about others, you do not buy these types of insurance, and you are not a prospective client.
I understand that disability insurance is critical for single people. But that still does not make it a "selfish" sale. Single people must protect their own income and basic lifestyle needs, but without protection, who is on the hook if a single person is disabled? Their friends, other family, community all pay the price for their failure to pay a premium.
One of my recent CLTC students shared this idea with me, and it applies equally to disability insurance: "If you ever need care (are disabled), would you (or your family) rather sign the front of the check or the back of the check?"
Next time you sit down with a client to discuss disability planning (pre or post-retirement) make sure to remind yourself who you are really there to protect.
China Oceanwide will buy Genworth in a $2.7-billion deal which includes a $1.1-billion capital commitment to pay off debt and invest in the US life insurance business.
“China Oceanwide is also aligned with Genworth’s long-term goals of serving the aging population in the U.S., and providing financial capabilities to those seeking home ownership.”
I believe this is good news for Genworth policyholders and the LTC insurance marketplace overall. Readers should note that two other active LTC insurers are also now foreign-owned. John Hancock is owned by the Canadian insurance company Manulife, and Transamerica is owned by Dutch insurer AEGON.
The US life & LTC biz must and will remain a US-based subsidiary of China Oceanwide, subject to US federal and state regulators. In-force policies must all be honored by law.
Click here for a link to the company's full press release:
I just received a somewhat disturbing e-mail from a financial advisor who forwarded to me an e-mail from his Lincoln MoneyGuard rep regarding reimbursement vs. indemnity. The arguments are so classic, and so unfair, that I thought I'd share my response - the original e-mail follows below. This is lengthy, advanced-learning!